Nvidia shares suffered their biggest one-day drop in history amid the selloff in artificial intelligence (AI) stocks. The company is also facing an antitrust investigation over its dominant position in the supply of AI chips.
The shares of Nvidia, the leading company in artificial intelligence (IA), they experienced their biggest drop in a single daydown more than 9% in value on Tuesday, as investors continue to pull out of AI-related stocks.
The company’s share price collapsed even more, falling an additional 2% in prolonged operations, which represented a total loss of almost 300,000 million dollars (272,000 million euros) in market capitalization. This followed news that the company has received a subpoena from the US Department of Justice (DOJ) for a antitrust investigation.
Concern over violations of antitrust laws
According to a Bloomberg report published after the US markets closed on Tuesday, the US Department of Justice (DOJ) issued subpoenas to Nvidia and other companies seeking evidence of possible violations of antitrust regulations.
DOJ officials are concerned that the absolute dominion of the chip manufacturer in the global market AI chips leave customers with limited options, making it difficult for them to switch to other market players if they do not exclusively use Nvidia products.
The investigation represents an escalation of an antitrust investigation that began in June, when the US began an investigation into the companies Microsoft and Nvidia. These tech giants have been the main beneficiaries of the AI boom since 2023, following Microsoft’s launch of the chatbot powered by AI, ChatGPTin February of last year.
Nvidia is the leading AI chip supplierspecifically its graphics processing units (GPUs), which are essential for hyperscalers that support the training of large language models (LLMs).
Despite the recent decline, Nvidia shares they kept going up 146% this year, making them the better performance among global technology stocks. However, the company reported disappointing quarterly results last week, indicating that Nvidia’s period of explosive growth, which began in the second quarter of fiscal 2024, could be slowing. This caused a 7% drop in its shares that day.
Tuesday’s selling suggests investors continue to dump AI stocks amid signs of the deterioration of the economyreflecting a broader trend in global markets.
Risk-averse sentiment prevails in global markets
Nvidia’s decline in the markets was also attributed to the worsening climate of concern about the macroeconomic context general. Risk aversion dominated global market movements on Tuesday, with major European benchmark indices ending in the red, while US indices fell at the start of the month.
The pan-European Stoxx 600 index fell 1%, the S&P 500 fell 2% and the tech-heavy Nasdaq fell more than 3%. He collapse was especially pronounced in semiconductor stocks, as Nvidia’s decline rippled through the world marketsand European chip equipment maker ASML lost more than 4%.
US economic data disappoints
On Tuesday morning, the US released worse-than-expected economic data, revealing that manufacturing activities contracted for the fourth consecutive month in August, reigniting concerns. recession fears in the largest economy in the world. Wall Street suffered its worst one-day drop since early August, amid global turmoil sparked by the Bank of Japan’s rate hike and growing economic concerns.
Investors increasingly seem more sensitive to economic indicators following early August selling, as the country’s Federal Reserve is expected to begin lowering interest rates this month.
A possible harsher cut could signal a rapid deterioration in economic conditions, since historically, an economic recession has always occurred during a cycle of Federal Reserve rate cut. Most other central banks have already started to lower rates against a backdrop of growth slowdown economic and relaxation of inflation.
It is also planned that the European Central Bank make a decision about the interest rates later this month, and market participants generally expect the bank to deliver its second 25 basis point rate cut of the year.
